[SINGAPORE] There is “significant uncertainty” over whether the US may lower – or even raise – the baseline tariff of 10 per cent for Singapore, said Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong on Tuesday (Jul 29).
When he sought clarification during a recent trip to Washington, the US administration was “non-committal”, he said. “They are still reviewing the tariff, and in time to come, will make the appropriate announcement.”
While the US is “not in the mood to discuss any discount”, Singapore has registered its interest if and when such talks become possible, he added.
At a dialogue in an SG60 conference held by the Institute of Policy Studies and the Singapore Business Federation, DPM Gan gave an overview of his trip to Washington, from which he had just returned on Tuesday morning.
He noted four aims of the trip: assessing the economy; engaging congressmen; discussing collaboration with the administration; and tariff talks.
Tariff uncertainty
The US has yet to give details of its planned sectoral tariffs on pharmaceuticals and semiconductors – two areas of key interest for Singapore. Ahead of the trip, DPM Gan had said he hoped to further talks on pharmaceuticals, with threatened tariffs coming as soon as Aug 1.
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As it turned out, he did not have the chance to meet US Commerce Secretary Howard Lutnick on his recent trip and thus did not discuss these.
“I think the administration’s focus now is to finish the negotiation on reciprocal tariffs,” said DPM Gan. “After that, it will start to engage countries (on) specific sectoral tariffs.”
Pressed for details later in the dialogue by Ambassador-at-Large Tommy Koh, the minister noted that earlier discussions had been held on pharmaceuticals, and these talks are ongoing.
In a May update by the Singapore Economic Resilience Taskforce, which he chairs, DPM Gan noted the possibility of preferential or even zero tariffs on Singapore’s pharmaceutical exports to the US.
On Tuesday, he said that while he could not give details as talks are ongoing, the US’ concern is having “a secure supply line of pharmaceuticals”.
This involves onshoring some production and also working with partners, he said. The question, then, is how Singapore can “be a reliable partner”.
On semiconductors, tariff talks have not begun, but Singapore is in discussions about access to artificial intelligence chips, he added.
As for US tariffs in general, there remains uncertainty about how these will be implemented, despite negotiations having been completed with several countries.
“The details have not been worked out, both in terms of definition as well as implementation,” said DPM Gan. These include details such as how to define and apply rules of origin, which can be very complex given the different goods and country-to-country transfers involved.
Cautious optimism
As for the trip’s other aims, DPM Gan said the outlook for the US economy seems “cautiously optimistic”.
He added that this is largely due to President Donald Trump’s One Big Beautiful Bill, which included tax cuts and business support measures.
Inflation remains muted for now, possibly because the full impact of the tariffs has yet to be felt, with businesses waiting to see if costs will rise in the second half of the year.
But recent indicators suggest a stable environment, and most businesses are either cautious or optimistic about the near-term future, DPM Gan said.
He added that when meeting both Republican and Democrat congressmen, he stressed both countries’ strong and longstanding relationship, and highlighted Singapore’s trade surplus with the US.
With Trump’s administration, he discussed potential cooperation in areas such as the digital economy and green economy.
He also encouraged the US to deepen engagement not just with Singapore, but with the broader Asian region, highlighting Asean as a fast-growing and economically significant area.
